Homeowners insurance is required on all mortgage loans. We suggest you shop around to find the policy that suits your needs. Most people purchase a policy with the same insurance company as their auto insurance. After you set up a policy with the company of your choice, wait to begin your coverage until you close on your home. The cash due at closing will include 12 months of your homeowners insurance which will be sent directly to your provider, and an additional two months (for reserve) of the premium which will be sent to an escrow account that we will set up for you.
Your monthly mortgage payment will include your principal payment, interest payment, property taxes and homeowners insurance. The bank will send your tax and insurance payments to the escrow account each month. The escrow account will pay your taxes two times a year and your homeowners insurance once a year. This will allow the bank to ensure the home insurance and property taxes are up to date.